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Supply Chain Focus: Etailing Logistics - Putting the e into retail

As the internet boom forces more fashion retailers to grapple with online retailing and become multi-channel operators, industry experts pick out the key logistical challenges.

COLUM JOYCE, EUROPEAN REPRESENTATIVE, IMRG

- What impact do increased internet sales have on warehousing?

A multi-channel retailer may currently use a weekly delivery cycle to stores, but with online sales they may need faster stock turns, which means many retailers will have to be more efficient in terms of warehousing.

- Should multi-channel retailers separate their store and web distribution operations?

Not necessarily. With different operations you need multiple stock control methods and will face increased overheads. If warehousing is already in place, the only extra element you need for etailing is a parcel carrier.

- What are the best delivery options for online retailers?

Sophisticated, signature-based services have come about because of the UK's high first-time delivery failure rate of 12%. About 50% to 60% of homes are empty all day, so retailers must consider flexible delivery arrangements.

- How can retailers deal with the higher amount of returns generated by etailing?

Returns could be reduced by giving more details about colour and material on the website. Retailers could also ask questions - about size, for example - that would allow the consumer to know if what they are buying is correct.

ALASTAIR CHARATAN, HEAD OF SUPPLY CHAIN DEVELOPMENT, WOOLWORTHS

- What impact do increased internet sales have on warehousing?

With online sales you are picking single orders, but with store deliveries you may be picking multiple quantities. Another factor is whether to reserve stock for online orders or deliver it on a first-come, first-served basis to the stores.

- Should multi-channel retailers separate their store and web distribution operations?

If you are multi-channel, customers can opt to pick up online orders from the store, so it makes sense to send product from the same warehouse as store deliveries. You also gain economies of scale from a single operation.

- What are the best delivery options for online retailers?

With home delivery, a balance must be struck between not demanding a signature for a product worth £2 and not leaving a £500 item on the door- step. In-store collection means customers can pick up at a convenient time.

- How can retailers deal with the higher amount of returns generated by etailing?

At Woolworths we don't have much of a problem. For back-to-school items parents tend to know what they want and for dressing up clothes size is not so critical. Customers can also exchange products for the right size in store.

WALTER BLACKWOOD, MANAGING DIRECTOR, HOME DELIVERY NETWORK

- What impact do increased internet sales have on warehousing?

The critical difference is that high street retailers usually handle product in bulk. Internet sales involve single orders that must be prepared for transit and protected for it. It is another step in the process.

- Should multi-channel retailers separate their store and web distribution operations?

Both operations may be in the same shed but receive different treatment. How the product is presented in the bag or box to an online customer will have an impact and may, for example, need wrapping in tissue paper or card.

- What are the best delivery options for online retailers?

It comes down to the retail proposition you want to create and selecting a partner that can provide it effectively. Retailers must speak to the consumer about what suits them - such as where the product can be left if they aren't in.

- How can retailers deal with the higher amount of returns generated by etailing?

Handling returns is a challenging process, but it makes it worse if retailers don't present appropriate information about their garments on a website. Consumers need to be able to see everything as if they were in a shop.

TONY DAWSON, SALES MANAGER, UPS SUPPLY CHAIN SOLUTIONS

- What impact do increased internet sales have on warehousing?

Internet sales generate smaller, more frequent shipments, increasing transportation costs but also driving revenue. They also require a new delivery channel, linking the warehouse directly to the consumer.

- Should multi-channel retailers separate their store and web distribution operations?

A smaller retailer with a single warehouse would probably use its existing infrastructure, while a national or international retailer may use one of its existing distribution centres as a dedicated ecommerce base.

- What are the best delivery options for online retailers?

Online retailers can't give instant gratification and should therefore use a reliable express delivery carrier that gets their product to the consumer as fast as possible, while taking into account cost of delivery.

- How can retailers deal with the higher amount of returns generated by etailing?

Returns management is often overlooked, but it offers retailers the chance to differentiate. A retailer should minimise returns by educating buyers and having clear and simple product descriptions online

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